Blog

07/19/17

Easy Weather Forecasting

We are in a series outlining the big ideas that would serve as the foundation for Tim’s proposed healthcare reform plan. Click here to find the prior posts.

Does it really take talent to forecast the Phoenix weather in July? Yes, looking at the off camera map while pointing to the right spot on the green screen where the high pressure system is located, all while maintaining perfectly coiffed hair is tricky, but, you know, figuring out what the weather will be tomorrow – comes down to whether you add the adjective ‘dang’ in front of ‘hot?’

Some forecasting is easy. As in predicting that people with pre-existing conditions, especially when they have more than one of them (‘poly-chronic’ is the term that will impress), will consume a lot of healthcare services. You don’t need an abacus.

We’ve started our ‘if Tim was in charge’ fantasy stroll looking at two cross-cuts of people whose healthcare spend is high: the elderly and the poor. Now, we get to the third – people with multiple chronic diseases. Yes, the venn diagram for these three has a lot of overlap, but this last lens is powerful for thinking about how we fix our health system.

According to the CDC, one in four Americans has multiple chronic conditions (last more than a year, require ongoing medical treatment, impact daily living) and this group consumes 71% of total spending. That means the average per capita spending for these 80 million people is about $28,500 per year. But it also means the other 240 million people average less than $4,000 per person per year. We’ll come back to this point later.

For Medicare beneficiaries, it is even more extreme – three of four are poly-chronic and account for 93% of Medicare spending.

If we can crack the code here, we can save a boat load and improve the lives of the people for which health and healthcare have the biggest impact. I’d follow two simple principles:

First, put these people a high-risk plan specifically designed for their unique situation. Stop funding this through the general insurance market because that obscures their real cost and distorts premiums for everyone else. We are not trying to ‘insure’ against some risk probability – we KNOW these people are going to file claims, and a lot of them. We are simply going to help pay their bills. Add a specific tax on the rest of us to pay for it.

Yes, a market-oriented conservative who thinks the government can generally screw up a lemonade stand is actively advocating a new tax. Come on Grover Norquist, bring it on big boy. We’re going to pay one way or another…I just want it out front so we can manage it rationally.

Second, all of these folks are unique and complicated. Move the accountability for their care from the monoliths – government, payers, integrated delivery systems (yep, I am going to take this on this sacred cow) – to people on the ground. Give them freedom to make clinical decisions, freedom to move beyond the traditional bounds of healthcare services, and yes, participation in the financial upside.